Landowners: Extra conservation tax incentive will expire at end of year

Dec 06, 2007

Thinking about creating a conservation easement on your property? If so, it's worth your while to do so before December 31. That's when an enhanced 2006 tax incentive expires unless Congress reinstates it.

The 2006 enhancement, which enables landowners who protect their land using voluntary conservation easements to earn tax deductions for easement donations, increased from 30 percent to 50 percent of a qualified donor's yearly income. For qualified working farmers and ranchers, the law also allows deductions up to 100 percent of their income and triples the carry-forward period for deductions from five to 15 years. That means a qualified farmer or rancher may not pay federal income taxes for a total of 16 years.

Landowners donating easements can keep the land in farming and within the family. They can also recover the land's increased development value while still retaining title to it. Most importantly, they can have the satisfaction of keeping good farmland from being bulldozed into a housing development or a strip mall.

The enhanced tax incentives apply only to agreements made through 2007. However, the Land Trust Alliance and other groups are working with legislators to make the current law permanent.